India Inc’s pitch: Extend sops, boost ease of doing business

Vijay C Roy

New Delhi, July 21

Industry chambers are abuzz with expectations from the Union Budget 2024-25 to be presented by Finance Minister Nirmala Sitharaman on Tuesday. Industry bodies, representing the Indian corporate sector, such as the Federation of Indian Chambers of Commerce & Industry (FICCI) and the Confederation of Indian Industry (CII) expect the Budget will aim at creating a roadmap for the country’s economic growth for the next five years. Among the major expectations are:

Set up ministry of investment

Currently, the process of investment for foreign investors needs clearances from several ministries, including Finance, Home, Commerce, External Affairs, etc., besides state governments, certain institutions and regulators like the RBI, SEBI, stock exchanges and banks among others. The CII has recommended the setting up an independent ministry for investment, which could become the single point of contact for facilitating foreign investors seeking to invest in India as well as Indians wanting to invest abroad.

Expand ambit of PLI scheme

The industry chambers are of the view that there is a need for revamping and expanding the production-linked incentive (PLI) scheme to encourage employment generation. The PLIs should be expanded to labour-intensive sectors such as apparels, toys and footwear manufacturing. Also, to cut dependence on imports, PLIs should be extended to sectors that not only have large imports but also have domestic capability.

Encourage R&D

FICCI has recommended the government to encourage expenditure on scientific research, the lifeline of businesses globally. The withdrawal of weighted deduction in respect of scientific research expenditure will create hurdles for the “Make in India” initiative of the government.

No tax on PF interest

According to FICCI, interest on an employee’s contribution to his/her provident fund account above Rs 2.5 lakh in a financial year should not be taxable. Before FY 2021-22, the interest credited to the EPF account on any amount of contribution was tax-free. Now, a cap of Rs 2.5 lakh has been introduced. Either this should be withdrawn or the limit should be doubled to Rs 5 lakh.

Boost to consumption demand

The CII, in its Budget recommendations, suggested the government should consider cutting down taxes on fuel, which will in turn lead to rise in disposable income and thus, boost consumption.